It remains to be seen how Chief Minister Nitish Kumar responds to this as he had asked for Rs 20,000 crore allotment for Bihar. JD(U) MP Ali Anwar said, "We has asked for Rs 20,000 crore. The government is providing Rs 12,000 crore. We will continue our demand till we get the amount."

He added, "Our demand is for special status for Bihar. We will continue our demand till we get it. The entire people of Bihar are with us. We are not asking for any special favour. The criteria for special status should be changed. Whichever states are backward should be given this status."

Congress is said to be watching the political developments closely and is reportedly eyeing JD(U) as a prospective ally. Information and Broadcasting Minister Manish Tewari, however, denied there is anything political in the cabinet decision.

"UPA has been running a government for the past nine years. It has been our endeavour not to mix politics and governance. But we live in a democratic country and everybody is free to draw his or her own conclusions," Tewari told reporters when asked if the package has come in the wake of strained relations between JD(U) and BJP.